Tips for Buying in a Seller’s Market

Act Quickly: It’s natural for a homebuyer to want to take their time and make calculated decisions when making possibly the most significant purchase of their lifetime. Unfortunately, a seller’s market doesn’t allow such luxuries. When the market is red hot, homes are going under contract within days, sometime hours. Any amount of hesitation could mean the difference between going under contract and going back to scheduling showings. So, definitely have a pre-approval letter from your lender and be prepared to look at homes on weekdays. Keep in mind, you’re not at risk of buying a “lemon” just because you acted quickly. As long as you conduct a professional inspection and abide by the timeline detailed in the contract, if red flags pop up, you can legitimately terminate the contract and have your earnest money refunded.

Be Prepared to Offer at Least Full Price: Obviously, your agent will let you know if the home is over-priced, but if it’s near market value, it will be a waste of your time to submit an offer below the list price. In many instances, there will be a multiple-offer situation where the seller will benefit from deciding between an array of offers. Naturally, they will pick the contract the nets them the most gain, so it’s quite possible you may have to submit an offer higher than the list price. Recently, a strategy called an “acceleration clause” has been implemented by industry professionals where your offer essentially states that you will outbid the highest bid offer by a specific dollar amount, up to a separate dollar amount (discuss details with your agent). There can be a fine line between submitting the winning offer and overpaying, so continue to consult with your agent to find an acceptable balance.

Don’t Be Greedy: As previously stated, the seller will accept the offer that nets the most gain, but they will also be inclined to accept the cleanest, most straight-forward offer. Either you’re benefitting from whatever caused the seller’s market (i.e. low mortgage interest rates) or you’re in a time crunch, so keep things simple. For instance, if the seller has previously stated that the washer and dryer are not included in the sale, don’t submit an offer asking for them to be included. The reason: someone offering the same price (or less) may leave the appliances out of the sale and their contract is accepted instead of yours as a result.

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